Johannesburg investors snapping up properties in Mouille Point

Mouille Point is a great example of a Cinderella suburb, having shaken off its shabby reputation to become one of Cape Town’s most sought-after addresses.

With a prime, seafront location, mere minutes away from the CBD, the V&A Waterfront and the Green Point Park and Stadium, it’s no great surprise that Mouille Point has caught the eye of both trendy locals and the holiday crowd. As time goes by, however, demographics are taking a decided shift towards out-of-town investment purchasers and short-term letting. Claire Harris, sales agent for the Rawson Property Group’s Green Point franchise, explains why.

“There are a few reasons behind Mouille Point’s growing popularity as a vacation-rental and investment suburb,” she says. “The first is obviously the wonderful holiday spirit that permeates the whole area.”

Harris describes the seagull cries and calls of Mouille Point’s famous red- and white-striped “Moaning Minnie” lighthouse as the backdrop to a much-loved beachfront with plenty of attractions for visitors of all ages.

“Children adore the putt-putt course, the activity park with its new outdoor ice-rink and, of course, the Mini Blue Train rides,” she says, “while adults enjoy the scenic walkways, great restaurants and chic cafés. It all adds up to a permanent holiday, tourist-destination feel, which is very unusual so close to the inner city.”

The second reason behind Mouille Point’s popularity, particularly with out-of-town investors, lies in the type of property found in the suburb.

“Ninety-nine percent of Mouille Point properties are in sea-facing sectional title apartment blocks,” says Harris, “which makes them ideal for lock-up-and-go lifestyles and vacation rentals. There’s currently a blend of new developments and older blocks, but widespread remodelling is ensuring dated properties are few and far between.”

With a median price of R3.45 million and average sales sitting at over R5.3 million, a little renovation can go a long way and buy-to-flip purchases are not unusual. Capital growth in the area, however, can generate returns of as much as 19% over the course of a seven year holding period, so a longer-term investment can be more profitable at the end of the day.

“Demand is high, prices are increasing, and we’re not expecting that to change,” says Harris. “That’s another reason we’re seeing investors lining up to get into the area.”

According to Harris, the majority of buyers in Mouille Point at present are over fifty and based in Johannesburg, and many let their purchases on Airbnb or similar when they’re not in residence themselves.

“The flexibility of platforms like Airbnb makes it easy for landlords to get the best of both worlds – the financial rewards of a profitable investment and the lifestyle benefits of a great holiday home,” she says. “As South Africa becomes more and more of a top international tourism destination, demand for holiday accommodation in Cape Town is only going to grow. We’re the gateway to Africa, and if you can capitalise on that with a property somewhere as spectacular as Mouille Point, you’re bound to see excellent and ongoing returns.”

Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.

These days most buyers are using online property portals like Private Property when house hunting due to the convenience, up to date information and variety on offer. “The property portals have revolutionised the way buyers shop, but they do need to be cautious – viewing photos online is no replacement for viewing the property in person,” says Bruce Swain, CEO of Leapfrog Property Group.

Owning a home is a milestone that most South Africans aspire to. Becoming a homeowner is a step towards growing personal wealth and owning an asset that appreciates in value over time, provided of course that the correct principles are applied during the buying stage of the process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.

The suburb of Greenstone in Johannesburg east came to be over the last two decades. “In the beginning, it was literally just a hill with not so much as a shopping centre,” says Michael Levy, Property Consultant at Jawitz Properties Bedfordview. Today it has plenty shopping facilities and is fully built, boasting high-density, upmarket housing and residential estates, though still has a few pockets poised for commercial development.

Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.